Morris v. KanEquip, Inc.

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CORRECTED

NOT DESIGNATED FOR PUBLICATION

No. 120,274

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

JAMES MORRIS,
Appellant,

v.

KANEQUIP, INC.,
Appellee.


MEMORANDUM OPINION

Appeal from Ford District Court; E. LEIGH HOOD, judge. Opinion filed August 16, 2019.
Affirmed in part, reversed in part, and remanded with directions.

Robert A. Levy, of Law Office of Robert A. Levy, of Garden City, for appellant.

Janette C. Gaddie, of Law Office of Pamela W. Brown, of Overland Park, for appellee.

Before ATCHESON, P.J., HILL and BUSER, JJ.

PER CURIAM: This is an appeal by plaintiff, James Morris, of the district court's
order granting summary judgment in favor of the defendant, KanEquip, Inc. (KanEquip).
Relevant to this appeal, Morris sued the dealership claiming negligence and breach of
contract arising from the sale of a new tractor without the installation of four bushings on
the shift rails as part of the transmission. KanEquip moved for summary judgment based
on its assertion that the relevant statutes of limitations had expired on both claims prior to
the filing of Morris' lawsuit. The district court agreed and granted summary judgment in
favor of KanEquip. Morris appeals.
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Upon our review, we reverse and remand for further proceedings with regard to
the negligence claim. We affirm the grant of summary judgment in favor of KanEquip as
to the breach of contract claim.

FACTUAL AND PROCEDURAL BACKGROUND

Morris purchased a new tractor from KanEquip on August 19, 2010. The tractor
was sold with a two-year limited manufacturer's warranty. Over the years, KanEquip
performed warranty and nonwarranty repairs and routine maintenance on the tractor
numerous times. About six years after the purchase, in July 2016, Morris began having
problems with the tractor's gears and transmission. Morris took the tractor to KanEquip
for service and on November 28, 2016, KanEquip discovered that the transmission's shift
rails were missing four bushings, apparently because the manufacturer never installed
them. KanEquip notified Morris of its discovery by handwriting on the repair invoice.

Several months later, on August 1, 2017, Morris filed a petition alleging the tractor
"was defective and then sold by [KanEquip]." Count One alleged the tort of negligence.
As a result of KanEquip's negligence with regard to the missing bushings, Morris claimed
that he had substantial repair costs, down time, and other damages in excess of $75,000.
Count Two alleged that "[a]s a result of the defective product, [KanEquip] breached its
contract with [Morris] and [Morris] is entitled to a recission of the contract and is entitled
to a full refund of all monies paid by [Morris]." Count Three alleged a Kansas Consumer
Protection Act (KCPA) claim.

In February 2018, the district court granted Morris leave to join the tractor
manufacturer, Buhler Versatile Inc., as a defendant in the lawsuit. However, Morris never
added the manufacturer as a party defendant.

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On February 2, 2018, KanEquip filed a motion for summary judgment. With
regard to the negligence claim, the dealership asserted the claim was barred by the statute
of limitations and the economic loss doctrine. KanEquip also asserted the breach of
contract and KCPA claims were barred by the statute of limitations.

After a hearing on the motion, the district court granted summary judgment in
favor of KanEquip. The district court found the negligence claim in Count One was
barred by a two-year statute of limitations under K.S.A. 60-513(a)(4), which lapsed on
August 19, 2012. Of note, given this holding, in the journal entry the district court stated
that it would not rule on whether this claim was also precluded by the economic loss
doctrine.

With regard to Count Two, the district court found the breach of contract claim
was barred by a four-year statute of limitations under K.S.A. 84-2-725, which lapsed on
August 19, 2014, or a five-year statute of limitations for written contracts under K.S.A.
60-511(1), which lapsed on August 19, 2015. While the district court focused on
language in the petition which referred to the sale of the new tractor on August 19, 2010,
the district court observed that Morris' petition did not specify which contract Morris
claimed was at issue.

With regard to Count Three pertaining to the KCPA violation, the district court
found in favor of KanEquip because Morris did not allege any specific deceptive act
which would constitute a potential viable cause of action.

Morris filed a motion to alter or amend the judgment, but the district court
summarily denied the motion. Morris filed a timely notice of appeal.



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ANALYSIS

We begin the analysis with our well known standard of review pertaining to
summary judgment motions:

"'"Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as
a matter of law. The trial court is required to resolve all facts and inferences which may
reasonably be drawn from the evidence in favor of the party against whom the ruling is
sought. When opposing a motion for summary judgment, an adverse party must come
forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive
issues in the case. On appeal, we apply the same rules and when we find reasonable
minds could differ as to the conclusions drawn from the evidence, summary judgment
must be denied."' [Citation omitted.]" Patterson v. Cowley County, Kansas, 307 Kan.
616, 621, 413 P.3d 432 (2018).

Where there is no factual dispute, appellate review of an order regarding summary
judgment is de novo. Martin v. Naik, 297 Kan. 241, 246, 300 P.3d 625 (2013). However,
"[i]f 'reasonable minds could differ as to the conclusions drawn from the evidence'—in
other words, if there is a genuine issue about a material fact—summary judgment should
be denied. [Citation omitted.]" Siruta v. Siruta, 301 Kan. 757, 766, 348 P.3d 549 (2015).

Morris does not appeal the district court's adverse summary judgment ruling
regarding Count Three—the KCPA claim. As a result, we will not review that judgment.
We will, however, separately analyze the district court's summary judgment rulings on
the remaining two claims which Morris does appeal.



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THE NEGLIGENCE CLAIM

The district court ruled that the applicable statute of limitations for the negligence
claim was provided in K.S.A. 60-513(a)(4). That statute provides a two-year statute of
limitations for "[a]n action for injury to the rights of another, not arising on contract, and
not herein enumerated."

In granting summary judgment to KanEquip, the district court found that July 21,
2016, was "when [Morris] first complained to [KanEquip] about problems with the
tractor's gear and transmission." Without explanation, the district court then concluded,
"[Morris'] negligence cause of action is barred by the two-year statute of limitations set
forth in K.S.A. 60-513(a)(4), which lapsed on August 19, 2012."

On appeal, Morris argues that the "two year statute of limitations is negated by
K.S.A. 60-513(b)." K.S.A. 60-513(b) provides:

"[T]he causes of action listed in subsection (a) shall not be deemed to have accrued until
the act giving rise to the cause of action first causes substantial injury, or, if the fact of
injury is not reasonably ascertainable until sometime after the initial act, then the period
of limitation shall not commence until the fact of injury becomes reasonably
ascertainable to the injured party, but in no event shall an action be commenced more
than 10 years beyond the time of the act giving rise to the cause of action."

Morris asserts his negligence claim is not barred by the applicable two-year statute
of limitations because he was unaware of the defect in the tractor until several months
before he filed his lawsuit. In his petition, Morris asserted: "On or about November 28,
2016, . . . [Morris] was first informed and notified that the four required bushings for both
shift rails were never installed." Moreover, in the "preface" to Morris' response to
KanEquip's motion for summary judgment he stated: "On or about November 28, 2016,
KanEquip first discovered that four necessary shift fork bushings in the transmission
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were '. . . never installed from factory.' [Morris] was never informed until then. At
earliest, any injury/damage would have been clutch problems in July, 2016."

In short, Morris contends the two-year statute of limitations did not begin with his
purchase of the tractor on August 19, 2010, but was tolled until he reasonably ascertained
the injury on November 28, 2016, when KanEquip first informed him of the missing
bushings. Under this tolling theory, the filing of Morris' petition, on August 1, 2017, was
well within the two-year statute of limitations.

In ruling from the bench on KanEquip's motion for summary judgment, the district
court initially did not discuss whether K.S.A. 60-513(b) was applicable under the facts
and circumstances of the case. After the district court had ruled, Morris' counsel noted
that in his briefing he had raised "the ten-year statute under 60-513." The district judge
responded, "I don't believe it applies, Mr. Levy. I'm making that ruling." No explanation
was given for this legal conclusion.

Morris reprised the K.S.A. 60-513(b) tolling argument in his motion to alter and/or
amend judgment and/or reconsideration. The motion was summarily denied.

On appeal, KanEquip acknowledges Morris' lack of knowledge regarding the
missing bushings when it responds that "[i]t is undisputed that in 2016, [Morris] and
[KanEquip] both learned that 4 transmission bushings for shift fork rails were missing
and apparently not installed when the 2010 tractor was manufactured." Additionally,
KanEquip states that "[Morris] concedes, before 2016, he was not aware of any
transmission problems, and before 2016, Appellee had performed only routine
maintenance unrelated to the transmission."

In its appellate briefing, KanEquip does not address the tolling implications raised
by K.S.A. 60-513(b), except to state that "during the summary judgment motion hearing,
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the district court specifically ruled K.S.A. 60-513(b) did not apply to the negligence
claim."

K.S.A. 60-513(b) states the statute of limitations in a tort action begins to run
when the act first causes substantial injury. "Kansas courts have interpreted the phrase
'substantial injury' to mean 'actionable injury.' [Citation omitted]." Michaelis v. Farrell,
48 Kan. App. 2d 624, 630, 296 P.3d 439 (2013). Thus, the statute of limitations generally
starts to run at the point at which the plaintiff could have first filed and prosecuted the
claim to a successful conclusion. LCL, LLC v. Falen, 53 Kan. App. 2d 651, 660, 390 P.3d
571 (2017), aff'd 308 Kan. 573, 422 P.3d 1166 (2018).

Of importance to this appeal, K.S.A. 60-513(b) provides a discoverability
provision which tolls the statute of limitations until a point in time at which the injury
was reasonably ascertainable. "'The rule which has developed is: The statute of
limitations starts to run in a tort action at the time a negligent act causes injury if both the
act and the resulting injury are reasonably ascertainable by the injured person.' [Citation
omitted.]" Michaelis, 48 Kan. App. 2d at 630-31.

Kansas courts have provided guidance on the meaning of "reasonably
ascertainable." "Inherent in 'to ascertain' is 'to investigate.'" Davidson v. Denning, 259
Kan. 659, 675, 914 P.2d 936 (1996). Further, reasonably ascertainable does not mean
actual knowledge:

"When reason exists to suspect a negligent act and when information exists from which
negligence can be determined, the limitations period will start. In other words, 'Kansas'
"fact of injury" standard postpones the running of the limitations period until the time the
plaintiff is able to determine that [his or her] injury may be caused by some act of the
defendant.' [Citations omitted.]" Michaelis, 48 Kan. App. 2d at 631.

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Whether an injury was reasonably ascertainable is evaluated under an objective
standard that takes into account all of the surrounding circumstances. Falen, 53 Kan.
App. 2d at 664. "If examining the surrounding circumstances shows that the plaintiff
clearly has knowledge of his or her injury and that the defendant was the likely cause, the
trial court can make the legal determination that the injury was reasonably ascertainable
at that point." Michaelis, 48 Kan. App. 2d at 631. However, if the evidence is in dispute
as to when the substantial injury first appeared or became reasonably ascertainable, then
the issue is to be determined by the trier of fact. 48 Kan. App. 2d at 631.

Applying the law to the facts of this case, the statute of limitations began to run
when Morris first ascertained there was a defective transmission in the tractor sold by
KanEquip. For its part, KanEquip argues the actionable injury occurred on the purchase
date, August 19, 2010, because KanEquip would have been negligent in selling Morris a
defectively manufactured tractor and all of the elements of the negligence claim were
established on that date. However, under Michaelis, the statute of limitations would not
begin to run until there is both a substantial injury and the injury was reasonably
ascertainable by Morris. As a result, the critical question is whether the fact that the
tractor was defective was reasonably ascertainable on August 19, 2010 (when the tractor
was purchased), or on November 28, 2016 (when Morris discovered the manufacturer
never installed the bushings), or at some date in between.

The undisputed material facts indicate that Morris had not experienced any
problems linked to his transmission until July 2016 at the earliest. When the tractor
definitely began experiencing transmission problems in November 2016, Morris sought
out KanEquip which discovered the missing bushings and disclosed the defect in writing
to Morris on or about November 28, 2016. On that date, Morris had reason to suspect a
negligent act may have occurred and that he had suffered an injury caused by the seller
and/or manufacturer. Under these circumstances, the injury was not reasonably
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ascertainable until sometime in July 2016, at the earliest, and on November 28, 2016, at
the latest.

Under either factual scenario, given that the negligence claim was filed on August
1, 2017, by operation of K.S.A. 60-513(b) the claim was not barred by the two-year
statute of limitations provided in K.S.A. 60-513(a)(4). We are persuaded that the district
court made an error of law in concluding that the tolling period provided for in K.S.A.
60-513(b) was not applicable to the uncontroverted material facts relevant to the statute
of limitations issue. Resolving all facts and inferences which may reasonably be drawn
from the evidence in favor of Morris, we hold the district court erred in granting
summary judgment on the negligence claim in favor of KanEquip based on statute of
limitations grounds. The judgment is reversed and the negligence claim is remanded to
the district court for further proceedings.

Finally, for the sake of clarity, we note that KanEquip also sought summary
judgment on the negligence claim because it was barred by the economic loss doctrine.
As noted earlier, the district court did not rule on that basis and we have not reviewed the
merits of that argument or made a ruling expressing our opinion on the validity of that
particular defense.

THE CONTRACT CLAIM

In ruling in favor of KanEquip's statute of limitations argument relating to the
breach of contract claim set forth in Count Two, the district court found that the contract
claim was "barred by both the four-year statute of limitations covering contracts in sales,
set forth in K.S.A. 84-2-725, which lapsed on August 19, 2014, and the five-year statute
of limitations for contracts in writing under K.S.A. 60-511(1), which lapsed on August
19, 2015." In making this ruling, the district court found the contract at issue was the
sales contract for the new tractor which the parties entered into on August 19, 2010.
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On appeal, Morris concedes that the statute of limitations "would apply to the
contracts entered into [in] 2010 but would not apply to the contractual agreements
entered into for repairs or lack of repairs in 2016." In particular, Morris asserts he took
the tractor in for repairs in 2016 and KanEquip kept the tractor in the shop for nearly
eight months. Morris asserts but does not explain how this eighth-month period falls
within the statute of limitations.

In response, KanEquip argues that Morris has failed to even identify the contract
at issue or the breach which he alleges caused the injury. The dealership also quotes the
district judge at the hearing as stating, "When looking at the contract claim, I don't—no
contract was identified by [Morris]."

Morris candidly concedes that his petition claiming damages for breach of the
sales contract was filed beyond the four-year limitations period provided under K.S.A.
84-2-725(1) for sales contracts, in particular, and the five-year limitations period
provided in K.S.A.60-511(1) for written contracts, generally.

On appeal, Morris is focused on the claimed tractor repair contracts between him
and KanEquip that occurred in 2016. But Morris has not identified any particular repair
contracts at issue and the district court was unable to discern any. Although the record
contains the original purchase agreement for the sale of the tractor in 2010, it does not
contain any written contracts between Morris and KanEquip regarding subsequent
repairs. Generally, the appellant has a duty to furnish a complete record on all matters
seeking review. "As the party alleging error, [appellant] must furnish a record that
supports the claimed mistakes. Thus, '[w]hen there are blanks in that record, appellate
courts do not fill them in by making assumptions favoring the party claiming error in the
district court.' [Citations omitted.]" Moore v. Moore, 56 Kan. App. 2d 301, 320, 429 P.3d
607 (2018), rev. denied 309 Kan. 1348 (2019).

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Our reading of Morris' petition makes clear that he was seeking damages for
breach of the sales contract executed on August 19, 2010. On appeal, he concedes that the
applicable statutes of limitations bar this claim. His later contractual claims for
subsequent repairs to the tractor are not identified, briefed on appeal, or supported in the
record. Under these circumstances, the district court did not err in granting summary
judgment to KanEquip on the breach of contract claim. The district court's order of
summary judgment for KanEquip on Morris' claim for breach of contract is affirmed.

Affirmed in part, reversed in part, and case is remanded with directions.